One tactic Amazon has deployed is to give Kindles away to college students (such as this program at Arizona State University) in order for them to save money on textbooks. The real story here is that Amazon hopes to invest in the “lifetime value” of this influential customer segment hoping they will become avid buyers of e-books (and newspapers, magazines…) as they move into the real world. Proving this strategy has its merits but also its challenges, Amazon’s program has led to a group of blind students at ASU suing the school because the Kindle is “inaccessible to blind students.”

O n the surface, a future battle may appear to be between Apple and Amazon, but the key player is Adobe. Adobe, one of the prime proponents of the universal .epub book format (which Amazon does not support) and the ACS4 DRM (which Amazon does not support) could tip the e-book market balance in Apple’s favor if Apple decides to support .epub if/when it offers a tablet. Many developers are working on extensions to .epub that would allow publishers to create value-added goodies for e-book publishers such as interviews, games, videos, etc.. Such value-added books, sold on iTunes, are a market winner for everyone expect Amazon.

Much of this is speculation with one undeniable fact: Amazon and Apple may be in prime position to be major players in this emerging space, but the mega-opportunity belongs to Adobe

I fail to see the wow. The primary change on the home page is a customizable rail/column that allows the consumer to add his or her favorite pages/sites/social networks to provide a one-stop panoramic snapshot of everything that’s important in one’s world. The truth is, customization works best if those sites you want to add are either Yahoo properties or those (such as All Things Digital) who have formatted their content for customizable viewing. The “apps,” as they are called, are in three flavors: Yahoo sites, partner sites (or perhaps those who have worked to make their content suited for preview) and your favorites. A box allows individuals to add their favorites to the front page, but adding my blog and Twitter resulted in a major fail as these personalized add-ons failed to load previews. Adding Facebook, which looks to be pre-programmed, kept giving me a message to log in, but even after logging in, it didn’t work. Makes me wonder if others are having the same issue.

Beyond the customizable issues, why can’t the search box at the top of the page be customized so I can focus on the categories I search most: videos, blogs, news. I’d like to move image search off the main window and add one of my own preferences. And what’s with that little box at the top next to my name that asks for my status? Who sees that, and how do I see others in my network? And, lastly, if Bartz says that video is important to Yahoo, why isn’t there a single video window on the new homepage?

There’s wow and then there’s WOW. In the case of Yahoo’s new homepage, I think it falls short of both.

The cognoscente’s meme of the day is whether or not harsh words on Twitter cut off Sasha Baron Cohen’s “Bruno’s” U.S. box office hopes at the knees. Time’s noted film critic Richard Corliss believes that a decline in opening day revenue to the following day was due in part to bad cyberword of mouth. That is, a flood of movie going Tweeters expressed less than favorable reviews of the film. Given the fact that the average filmgoer cares less about what professional critics say and more what their friends tell them, bad word of mouth can be especially damaging when it is shared in real time. In the old days (maybe 15 years ago) a crummy movie could make it through the weekend with box office intact until folks met at the water cooler on Monday morning.

Pundits who have an excessive amount of time on their hands are combing through Twitter logs to validate or nullify this theory. I believe even if there is a kernel of truth to the “Bruno” mess, there’s a great lesson to be learned for anyone who has a product or service to market or sell: in the Web 2.0 world, a marketing campaign only starts once a product is released. Understanding social buzz and (more importantly) knowing how to react will give new life to the phrase “expect the unexpected.” All the social media monitoring tools and services won’t do a film studio or soft drink company one iota of good if they are not equipped to respond to bad worth of mouth with some agility.

Anyone can plan for success; planning for disaster is another thing. As Monty Python says, “No one plans for the Spanish Inquisition.” Somehow, I sense “Bruno” may be up there with an inquisition.

One key point made in the report was Microsoft’s need to take advantage of whatever momentum it was able to build based on its extensive and expensive ad campaign. The need to continue to add new features and functions that afford greater utility was essential to prove it was a serious, long-term contender, albeit a bit tardy. Based on such features as “quick add” to Hotmail, it may be a sign that Bing may have the chops to send a scare into its competitors.

“Quick add” offers the ability to seamlessly add the results of a search query to an email message. I cannot find such a feature in any of the competitors. I opened a new mail message in Hotmail, went to the Bing search pane, typed in “Ryan Howard” and was then offered text, images or video. I selected video and with one click could add the video to my email. Very slick.

I am not alone in my feeling about Bing; The New York Times’ David Pogue who says that in many ways Bing is better than Google. He was particularly taken with Bing’s ability to provide relevant structured data for results in Bing’s target categories: travel, shopping, health and local. All of its research and focused planning may have paid off for Microsoft in developing a winning game plan for the consumer search market.

Cool features and funny (depending on your POV) TV ads (here’s one), are fine, but what can we expect in terms of results? The thinking here is that, based on its current momentum and ability to add utility, Bing could gain as much as five share points by the end of the year. Five points keeps Bing third among the big players, but it would impress consumers, the (ever doubtful) cognoscenti and advertisers. Count Google and Yahoo! among those who should be concerned (if they aren’t already).

The addition of Lexcycle does a few things for Amazon, a company slowly but surely gobbling up pieces of the offline and online publishing value chain. Stanza, a better and more popular e-reading app for mobile devices than the current Kindle iPhone app, will strengthen Amazon’s position in the mobile world which (at present) is used as a companion channel for its e-reader. Since the mobile device is perhaps better suited for newspaper and magazine consumption, I wouldn’t put it past Lexcycle to develop an app for both the Kindle as well as the mobile phone that preserves the newspaper experience for consumers on the go. At present, the Kindle does a poor job in rendering newspapers and magazines.

Lexcycle is beta testing a Stanza for the desktop which looks to provide an elegant PC or Mac-based reading experience. Again, that’s not been Amazon’s strong suit but one in the arsenal of companies such as Olive Software, Zinio and Libre Digital (under its Newsstand product). Microsoft also has been dabbling in this space, partnering with The New York Times in creating a desktop e-reader. Offering publishers—and in this case there’s a heavy emphasis on newspapers and magazines—a multichannel distribution opportunity to include e-readers, mobile devices and computer desktops. Such a gambit puts Amazon in even more rarified air than it current occupies. Also, if the netbook craze continues to gain momentum, that device becomes an interesting venue for e-reading, especially given its internet connectivity, affording publishers the ability to update content as needed.

Amazon’s stockpiling of essential publishing value chain components is perhaps book publishers’ greatest nightmare. One company practically controlling distribution and consumption in an emerging digital channel is a throwback to such industrial giants as Carnegie and Ford. It sure is a story that would make a great book; Amazon is likely to write it, publishing it, create the e-book and sell it for top dollar.

The move turns Hulu’s lineup into something that closely resembles your average low-end cable system, with only CBS absent, putting TV.com (CBS’s version of Hulu) in a precarious position as it contemplates future moves. YouTube, thought to be the prime competitor to Hulu, has recently added premium content in the form of Sony/Crackle comedies (hold on, is that really premium) and some rather weathered films (“the Mod Squad,” “Carrie”) so the Disney-Hulu deal sets the stage for Hulu passing YouTube in online viewership, perhaps not in total views, but in views of premium content that appeals to major advertisers.

A few more points to consider: still left in play are a few crown jewels whose addition could be essential in this TV 2.0 online programming race. Showtime, a CBS company, is likely to go to TV.com; Viacom, a company not especially happy with YouTube for alleged copyright violations, which has a roster that includes MTV, BET, Comedy Central, Nickelodeon, etc. Will Viacom go with Hulu, TV.com or create its own online network? And then there’s HBO, in the process of varied experiments for online distribution. HBO’s move may be closely aligned to the cable industry’s proposed moves into the online space and that brings forth the question whether the current online TV 2.0 space is just a prelude to the emergence of a MSO-powered online presence ala Comcast’s planned evolution of its Fancast site from video portal to cable service add on. Such an offering would be tied-to/bundled with cable service. If that’s the case, Hulu may be just building a content rich, user-friendly service with a powerful backend infrastructure that will be too good for most MSOs or aspiring TV-hungry telcos to pass up. If that’s the case, Google will truly regret it bought YouTube.

The new structure speaks to Bartz’s former role as head of Autodesk, a software publisher, and her work at Sun Microsystems where a more centralized organization led to fewer layers of bureaucracy and more consistent decision making. This move is Bartz’s clear statement that she is not only in control, but she views information as power and places her in a prime position to be at the center of an ongoing informational hub. For Yahoo!, it marks the end of labyrinth of roles within products, technologies and marketing and ushers in a model of greater individual accountability (not to mention public and behind-the-scenes sniping). In addition, Yahoo spokespeople say Bartz was appalled at the way Yahoo interacted with its customers and is creating a new Customer Advocacy group whose head (yet to be named) will gather customer insights and synthesize them for use across the organization.

Specifically, the new org structure looks like this:

• Tech and Product groups will be combined to create a single organization called Products. Products will be led by Ari Balogh as EVP of Products and CTO, reporting to Carol Bartz. This organization is responsible for the vision, strategy, and quality of every product we create — regardless of region, device format or category.

• Instead of multiple regions, there will be now two regions – North America and International. The regions are responsible for delivering Yahoo!’s products, programming and services to consumers, partners and advertisers in local markets. North America will be led by Hilary Schneider, EVP, North American Region, reporting to Carol Bartz. International’s leader will be hired soon.

* In mobile, David Ko will lead the mobile business, strategy and monetization teams for Yahoo! (Head of Global Mobile Business, reporting to Hilary Schneider).

• A Chief Marketing Officer (CMO) role has been created to oversee global marketing strategy and provide direction for our marketing function. The new CMO is Elisa Steele who was most recently with NetApps.

It’s worth calling out the deletion of regions and sub regions in the corporate structure. Only 30 percent of Yahoo!’s revenue comes from outside the U.S., so the company believes viewing their opportunity as two regions will allow them to have more uniform product messaging and product deployment. And while not a headline grabber, Yahoo! is creating a centralized Service Engineering & Operations (SE&O) team which will be chartered with delivering common technology services at scale, including application management and infrastructure. This should not only result in a cost savings but will allow the company to be more agile with a single point of internal technology governance.

Yahoo! followers are doing a light head scratch over the choice of Elisa Steele as CMO, wondering how a career at NetApps provides the expertise to work at Yahoo!. One school of thought would say marketing principles are uniform from one market to another; the other would be that there was a possible prior working relationship between Steele and Bartz during their time at Sun Microsystems. Also somewhat dampening the reorg message is the departure of Blake Jorgensen, Yahoo!’s CFO. Finding a suitable replacement will be crucial to keep Wall Street engaged and a believer in the company’s new direction.

So, what’s next? It would be great to be a fly on the wall in the Yahoo! cafeteria to gauge how the rank and file feels about the news. Yahoos should be glad to have a clearer, cleaner chain of command with management empowers rather than confuses its minions. The tale will not be told, however, until this shakeup actually results in some quick, market-changing offerings that gets everyone yodeling again.

Item one: Google adds book reading capability to the iPhone as well as phones running Android. It’s not an app per se, but if you go to http://books.google.com/googlebooks/mobile/ you see a site that has a number of books whose copyright expired that can be read on the phone’s 3.5-inch vertical display. A few scenarios could result, one in which Google (who recently resolved its feud with book publishers) sells books on behalf of publishers or one in which Google builds a book reading application and Apple sells books in the iTunes store. Everyone gets a piece of pie.

Item two: Amazon launches Kindle 2 which retails for $359. The new device includes text to speech conversion so books can be read aloud. The product will no doubt be met with initial demand (some pent up, some folks wanting to upgrade) but does it have legs in a tough economy? On the heels of the Kindle 2, Plastic Logic whose work in plastic electronics has yielded a new device that has been embraced by USA Today, the FT and book publishers via distribution via Libre Digital. Cost and business model (as in wisely partnering with publishers to offer unwritten, branded models) will roll out during 2009.

The e-reader scrum boils down to the iPhone Swiss Army Knife approach or the apparent Amazon standalone approach. It’s not a dead-on match in terms of features and functionality; from what I hear the Kindle offers up a pretty sweet book reading experience while the iPhone’s is passable as part of its multifunctional capabilities. On a cost basis, though, yet another device that has one purpose needs to offer a fairly exceptional value or experience versus one that texts, IMs, reads emails, allows you to find your lost car, read newspaper feeds and … As Alton Brown, the Good Eats guy says, there’s no room in my kitchen for a unitasker.

But maybe it’s not that simple. Amazon has a large and growing music library. Amazon also has a TV and movie service available through a growing number of partners. And, to enable smaller publishers to find their way onto the Kindle, Amazon offers free transcoding to make content Kindle ready. Add that to a bigger screen, built in WiFi (making it a de facto Web TV device, albeit in black and white for now) and content across varied media categories and things begin to take shape.. Let’s also not forget that Amazon is the music download supplier for T-Mobile’s G1 phone. So, perhaps Google is ready to partner with Amazon by building the rumored Kindle reader for Android (and other) mobile phones.

So, have we reached any new conclusions? No. Have we pointed out the e-reader space may finally be on a path to fulfill its potential? Sure hope so.

Sarcasm and bewilderment on execution aside, a cheer goes out to Harper Collins for even considering video books. The concept is bold and (done properly) has possibilities. As a free viral marketing instrument it’s a great idea; as original content with an actual original story and first-class production, perhaps it’s a standalone product. As a consumer-paid-for 20 minute infomercial, it’s a non starter.

In a recent essay in the Wall Street Journal, Chris Anderson (he of Wired and Long Tail fame) contemplates the “economics of giving it away,” the business model that has made the web what it is today: a chaotic playground of ad-supported and freemium services. Anderson suggests “free may be the best price, but it can’t be the only one.” In that spirit, book publishers, copyright holders of some truly compelling and valuable content, are in a position to break free from the shackles of the zero dollar economy and offer web users content worth paying for. As such, Harper Collins is to be applauded for even trying to step forward with this experiment. In terms of execution, I suggest publishers follow suit and not only embrace this concept but extend it in creative new ways.